1. Not all types of cooperatives are the same
   1. What do we think of when we hear the word ‘cooperative’?
   2. Consumption vs. labor as the foundation of cooperativism
   3. Organizing consumption for oneself... devalues labor
   4. It is not in the consumer's interest to spend in management hours what is saved in monetary costs
2. What happens when the managerialist model is applied to worker co-ops?
   1. Bosses without ownership, workers without leadership
   2. Neoliberal ideology reaches cooperatives
   3. The manager becomes an employer by turning worker-partners into employers of others
   4. Managerialism and offshoring
3. The dilution of cooperativism in the sea of ‘social economy’
   1. A consumer cooperativism based model that doesn't even work for... consumer cooperatives
   2. The meaning of ‘Social Economy’
4. Global consequences and alternatives
   1. The legal consequences
   2. The bases of an alternative

Not all types of cooperatives are the same

What do we think of when we hear the word ‘cooperative’?

The ‘co-operative idea’ as redefined by the ICA since its foundation¹ comes with a catch. It presents very different, if not opposite, things as if they were the same thing and as though they shared the same social significance.

Outside the Anglo-Saxon world and its cultural sphere of influence, when we hear the term cooperative we think of a group of workers who pool their labor, organize some type of common production and go out to the market to sell it, dedicating part of the surplus generated to systematically improve the material and cultural conditions of their own environment. In other words, a worker cooperative.

But that is not the ICA model. Under the ICA model, worker cooperatives do not even appear as such among its main branches, but are rather diluted by being equated with consumer cooperatives engaged in industrial production and services.

Consumption vs. labor as the foundation of cooperativism

The ICA model is not based on work but rather on consumption. Its default cooperative model is a group of members (individuals, businesses, landowners) who collectively organize the provision of a good, producing it if they need it.

It could be a group of neighbours who organize a supermarket for its members, a group of landowners and agricultural businesses who set up a mill, a winery or an oil mill, a group of parents who set up a school or a group of people who promote the joint construction of a building in order to become owners of a house at a better cost.

Organizing consumption for oneself... devalues labor

At first glance, we can already see that the interests related to labor and the value of people's labor are practically opposed.

A worker cooperative that makes software, a worker cooperative that grows a vegetable garden, an industrial worker cooperative that makes oil or a designer cooperative that sets up a studio need to have their work valued.

A consumer cooperative that hires developers, day laborers, workers or designers and whose aim is to reduce costs, has exactly the same incentives, the same need, as any capital company to devalue labor.

One only has to take a look at the news in the press, especially in Italy, on cooperatives of parents and institutions providing services to people with disabilities (a form of consumer cooperative) in order to realize that the resulting precarization of labour can be even greater in a consumer cooperative than in a capital company.

It is not in the consumer's interest to spend in management hours what is saved in monetary costs

When consumer cooperatives are made up of individual or family consumers - rather than companies, owners, etc. - collective participation in management tends to wither away as soon as the business gets going.

This is entirely logical. The cooperative is organized to reduce costs, but the time spent reviewing accounts, providing input into processes, etc. is an additional cost. A cost that is also paid in hours of particularly valuable free time. It would be absurd to spend on one thing more than you gain from the other.

The result is that the destiny of consumer cooperatives - whether they produce goods or services - is the professionalization of management. This is the origin of the managerialist model characteristic of the ICA that we often criticize.

What happens when the managerialist model is applied to worker co-ops?

Bosses without ownership, workers without leadership

Creating a separate managerial layer has consequences. There is no neutral bureaucracy. And bureaucracy does not mean paperwork, it means bosses, who manage production in practice and therefore exercise power over all the members, but at the same time, since they do not own the enterprise, they are controlled by them.

The contradiction is obvious, and the history of cooperativism in recent decades tells us clearly how, in a way that is both general and, no doubt, unconscious, the bureaucracy tends to overcome this very contradiction...

Neoliberal ideology reaches cooperatives

Any manager or management team coming into a cooperative needs to assert an autonomous space outside the political process represented by the members' assembly and the control of the Social Council.

A commonly chosen option is to define oneself as a technician, as a mere tool of the assembly that is focused on improving processes in order to increase economic outcomes. This actually means two things:

1. Workers lose sovereignty over the objectives of the cooperative and the economic means to achieve them.
2. By presenting cooperative management as a technical issue, managers create their own exclusive terrain to which they limit discussion of the cooperative's evolution. As long as they complete their responsibilities in this terrain, their management actions are, in practice, indisputable.

This was the door through which the neoliberal ideology of the business schools, which has impoverished and destroyed even first-rate multinationals such as Nike or Boeing, ended up dominating worker cooperatives.

Of course this required the famous neutralism of the ICA. ‘Neutralism’, the idea that cooperatives should remain outside ideological debates, was originally an ICA slogan against socialist and communist cooperatives which were cynically presented as sectarian and incapable of uniting all workers.².

In reality, neutralism has served above all to make a very determined and reductionist ideological reading of the accounts and objectives of companies and the way that they should be managed, treating worker cooperatives as if they were extractive or speculative companies.³.

One of the consequences of cooperatives incorporating this particular way of analyzing profit and loss outcomes has been the inheritance of many of the vices of capital-based companies: unnecessary indebtedness, short-termism, financialisation, a headlong rush to buy out the competition and ... relocations.

The manager becomes an employer by turning worker-partners into employers of others

These days, the alarmed French press reports on the story of a printing house converted into a worker cooperative, with the help of the locals as well as local authorities, which is abandoning the region where it was created .

The strategy of the manager of the cooperative entailed the purchase of three other printing works in crisis in the region and the neighbouring region. The new employees are no longer members of the cooperative. Now they are employees of the purchased companies.

As a result, the manager decides to close down the original printing plant in order to concentrate the staff in a larger, newly purchased plant in the neighbouring region. The worker-partners of the original Scop who do not want to relocate are simply dismissed and after a certain period of time and procedures they will lose their membership.

What has happened in practice? The worker-partners have collectively become employers of the employees of the acquired companies. The manager has reduced his contradiction of interests with the worker-partners at the cost of creating a new contradiction between partner and non-partner workers. The worker-partners are closer to becoming shareholders in the company that employs the - more numerous - others. And the manager into a typical CEO.

The most likely outcome, especially if the manager manages to keep buying up other competing companies with the help of banks, is a corporate transformation into an SL (Limited Company) or SA (Incorporated).

This sad ending is more common than one might think, especially when the founding group of workers is approaching retirement. This is not surprising. The message to worker-partners that the managers transmit is tempting for anyone on the verge of a bad retirement: after a lifetime of making sacrifices to run the business are you going to just going to give it away to a new generation and be left with a meager pension?

Managerialism and offshoring

Another path, the Mondragon way, is through internationalization and delocalization. We will not delve into this now. The model is the same as in the previous example but on a global scale. Production is moved to China, Mexico, India or Poland in search of low wages and market share. The workers of the acquired companies do not become members. And an increasing proportion of the income of the worker-members of the original cooperatives is dependent on the performance of the acquired enterprises.

They increasingly become collective employers. Their interests are with the management team and the internationalization experts and are increasingly opposed to the needs of the salaried workers - who are much more numerous than they are - employed by the subsidiaries in third countries.

In the end, as with the example of the printing house, the way in which the managers try to overcome the contradiction with the worker-partners of the cooperatives that arises from being a manager but not an owner of the company... is to turn the cooperative into a union of industrial owners, the ICA model.

The dilution of cooperativism in the sea of ‘social economy’

A consumer cooperativism based model that doesn't even work for... consumer cooperatives

We saw earlier how the incentives of consumer cooperativism, when its social base is made up of individuals, lead to a situation where the consumer cooperative can only be sustainable over time if there is an autonomous management team.

A frequent outcome is one in which the manager of a large consumer cooperative, such as a medical mutual, a supermarket chain or a cooperative bank, captures the organization in the same way as the CEO of a highly fragmented shareholder-owned company.

The better the manager's economic performance and the more complexity he or she incorporates into the management and structure, the greater his or her own stability, prestige, and remuneration will be. The same mechanisms that we have seen in worker cooperatives that are the benchmark of the ICA model, will be put in place: acquisitions, shareholdings, indebtedness, delocalization...

Nothing could be further from a social movement and more akin to a listed company than a large consumer cooperative.

However, it does not have to be this way, nor was it always this way. In reality, this was not the case until the ICA and its model became hegemonic. In fact, in the consumer cooperative boom of the early 20th century, it was quite the contrary. Consumer cooperatives did not go bankrupt and were neither financialized nor indebted. On the contrary, they formed agglomerations, built People's Houses, started schools and had neither renowned bureaucratic apparatuses nor star managers, despite managing what, for the time, were immense amounts of funds.

But of course, those consumer cooperatives were not designed for the interests of a layer of professional managers. Their members were not atomized individual consumers, but rather workers' societies and worker cooperatives. Their boards of directors were made up of representatives of organizations that were tightly controlled by their own rank and file, for whom the consumer cooperative was a way of improving the living conditions of their members, a complementary arm to wage demands and work organization.

The meaning of ‘Social Economy’

At first glance it seems strange that even in countries like Spain, where worker cooperatives are much more numerous and generate more employment than other cooperatives, the local branches of the ICA insist on diluting them in the sea of cooperativism in general.

But it is even more shocking that, given that worker cooperatives alone account for 5% of GDP - almost twice as much as the entire agricultural sector and almost as much as the construction sector - there continues to exist an insistence on subsuming the discourse on labor and cooperatives as a whole into the category of ‘Social Economy’.

The only relevant entities in economic terms that the term Social Economy includes in addition to cooperatives and related formulas (labor companies, guilds and mutual societies), are foundations, business foundations, and welfare entities (special employment centers, and large associations for the disabled and for social insertion).

From a social perspective, it is shocking to see that cooperatives are equated with large foundations whose mode of operation by definition has nothing to do with democratic participation in the economy - by definition, a foundation is answerable to a board of trustees and a foundational purpose. And from an economic point of view, creating a Social Economy space only creates a market... the market of managers.

In other words, the dilution of cooperativism and especially worker cooperativism in a larger sphere such as the Social Economy is yet another result of managerialism and responds to the interests of managers as an identifiable social group. It does not meet the needs of a cooperative movement whose meaning is increasingly blurred through the way in which it is presented and promoted by its supposed institutional representatives.

Global consequences and alternatives

The legal consequences

We have already commented several times on the most striking global consequences of the ICA model and hegemony for worker cooperativism.

It is due to the ICA lobby that the SCE (European Cooperative Society) regulations literally equate cross-border cooperatives with multinationals. And in the European legislative landscape we already have so-called worker cooperatives in which the number of votes can vary according to the economic capacity of the member when joining.

An example in which the ICA model dominates in countries that lack a strong cooperative tradition comparable to that of Spain is Portugal, which already has fewer worker cooperatives than the city of Mérida (60,000 inhabitants and 50 worker cooperatives).

When Portugal finally, following the harmonizing logic of the EU, created a modern cooperative law in the 21st century it did so under the dictates of the ICA, which it cites directly from the very first article as the source of its definition of cooperatives.

The Portuguese law distinguishes cooperatives by branch as if they were all consumer cooperatives or associated owners' cooperatives. Workers only appear as such in their capacity as employees in charge of a cooperative, which is not even mentioned as being theirs. Of course it allows the creation of worker cooperatives, but it makes them invisible to the point of not even giving them a name.

In other words, we are already in a phase of open and total denaturalization and dilution of worker cooperativism which, if left to the whim of the ICA, can only lead to the disappearance of its most fundamental bases.

The bases of an alternative

So far we have seen how the ICA model, a model of cooperativism based on consumer cooperativism that historically emerged to confront the rise of worker cooperativism linked to socialist egalitarian ideals:

1. Creates a managerialist model that introduces the most destructive neoliberal ideology into the heart of worker cooperatives, denaturalizes cooperative relations between workers and pushes towards the conversion of coops into owners' unions.
2. It detaches consumer cooperatives from the social fabric and real democratic control.
3. It amalgamates cooperativism into the incoherent soup of the Social Economy, making it socially invisible.
4. It promotes an evolution of the legal framework that dissolves and marginalizes worker cooperativism.

In this whole process, there is only one winner: the managers that the model places at the center and to whose interests it subordinates the workers, whether worker-partners or employees to whom cooperativisation is denied.

But is it possible to return to a ‘de-managerialized’ cooperativism, a cooperativism that makes collective action and reflection the basis of its organization and social impact a way of life?

As we see it, achieving this means creating a militant cooperative base with the capacity to serve as an example of the viability and necessity of maximalist worker cooperativism. This is what we are trying to nurture at the Center of Maximalist Studies and is what led to the birth of Communalia, the first ever association of maximalist cooperatives and NGOs.

But much more is needed: new worker cooperatives that really want to form the basis of a cooperative way of life, new members for worker cooperatives that are already established, new associations that take the responsibility to promote real worker cooperativism in a given environment or region...

And for all that, we can help you, but we cannot replace you. We are waiting for you, and believe us when we tell you that this is a battle worth fighting for.